Monday, March 5, 2018

Latest Events from Europe’s Gambling Regulatory Scene

Europe’s gambling regulatory scene has been very dynamic over the past several months, as some countries are crafting their new regulations, while others are struggling with the consequences of adopting regulations that had been frowned upon by EU authorities.

The following article provides an overview of some of the most important regulation-related events that took place recently and that are expected to have lasting effects on the way online gambling services are provided in the concerned European countries and on the continent’s overall gambling landscape.

Sweden to Accept Online Gambling License Applications from Mid-2018

The long-awaited liberalization of Sweden’s gambling market is expected to finally happen on January 1, 2019. That is the date the country’s government has set for the beginning of the new gambling regulatory regime.

Sweden submitted its draft gambling legislation for a review by the European Commission in late 2017 and entered a three-month standstill period during which no actions can be taken in relation to the new gambling law. The standstill period is set to end on March 20, 2018.

It became known last month that the country’s gambling regulator, Lotteriinspektionen, plans to begin accepting applications from operators interested to enter the liberalized market from July 1, 2018.

Once the new gambling law becomes effective, licensed online gambling operators will be required to pay an 18% tax on their revenue from Swedish customers. They will also have to ensure that their services are provided in a socially responsible manner and to players who are aged 18 or over.

The new Swedish gambling law will also prohibit operators from offering bonus offers to players, excluding first-time depositors. Companies will also not be allowed to extend credits to customers.

Sweden decided to replace the long-standing monopoly over the provision of gambling services in the country with a more liberal regulatory model as the country’s gray sector has been growing at a rapid pace over the past several years. It currently represents a quarter of the country’s whole gambling market. According to the latest gross gaming revenue figures provided by Lotteriinspektionen, the country’s unregulated market was worth SEK5.5 billion ($666.7 million) in 2017, up 13% year-on-year. The whole Swedish gambling market was worth SEK22.6 billion ($2.7 billion) during the twelve months ended December 31, 2017.

Referendum on Switzerland’s Money Gaming Act Scheduled for June

Swiss lawmakers approved last fall a new Money Gaming Act that aimed to replace the country’s gambling laws from 1923 and 1998. Some of the provisions of the new law were concerned with how online gambling activities would be conducted in the country.

Under the new regulatory regime, only land-based casinos would be able to offer online gambling services to Swiss players. Foreign companies would not be allowed to operate in the country’s re-regulated market and will have their domains blocked by local Internet service providers.

The ISP blocking provision was quickly opposed by the youth organizations of the Swiss People’s Party, the Green Liberal Party, and the Free Democratic Party and they launched a signature gathering initiative in October in order to bring the Money Gaming Act to a referendum.

The youth parties needed 50,000 valid signatures, which they collected and submitted in mid-January. It was recently announced that the referendum on the Money Gaming Act will take place on June 10. If voters approve the provisions of the country’s new gambling law, there will be no more obstacles before its eventual implementation. However, if residents of the country vote against its contents, Swiss politicians will be forced to make certain amendments to the piece of legislation.

Danish Court Orders ISPs to Block Illegal Gambling Websites

A Danish court issued in January a ruling that obligated local Internet service providers to block 24 websites that had been found to have targeted Danish customers without holding the necessary licenses from the Danish Gambling Authority.

Spillemyndigheden, the country’s gambling regulator, asked ISPs to block access to the 24 websites, some of which had been found to have offered skin betting to minors. Internet service providers failed to prevent said websites from targeting Danish customers, which prompted the Danish Gambling Authority to turn to court to resolve the matter.

In late January, the Frederiksberg court sided with the regulatory body and ordered ISPs to block the erring websites.

Last month, the Court of Justice of the European Union (CJEU) issued its stance on an issue raised by the Belgian Government. Belgian politicians had previously filed a petition against a set of recommendations for the protection of online gambling customers.

The recommendations had been promoted by the European Commission as ones that had not been legally binding and had only aimed to provide Member States with guidelines about how to effectively protect consumers of online gambling services.

However, the Belgian government had argued that these had violated each individual Member State’s right to introduce their own gambling consumer protection tools. It had also been understood that according to Belgian politicians, the EC recommendations could lower the standards previously introduced in the country’s Gaming Act.

CJEU Deems Hungary’s Gambling Law Incompatible with EU Treaty

CJEU once again slammed Hungary’s gambling regulatory regime in a ruling issued late last month. The top court of the European Union ruled that the country’s law, under which land-based casinos around Hungary are the only entities that can apply for and be granted licenses for the provision of online casino games, are breaching the EU treaty for the free movement of services across the union.

CJEU further pointed out that the country’s gambling regulations represented a “radical restriction” of what the union stands for. The ruling was issued in relation to a lawsuit brought by UK gambling operator Sporting Odds, which was fined by the Hungarian Tax Authority for providing unlicensed services to local customers. Last summer, CJEU made similar comments in a case involving major gambling operator Unibet, who had been fined for its presence in Hungary.